Houston sales tax rebate tops $1M

HOUSTON – Sales tax rebates to Houston went over $1 million in 2012 and are the first time ever for that revenue to the city to top the million dollar mark.

Sale tax rebates are a good local indicator on what is happening economically in a town’s market since they are directly linked to retail sales in a community. Sales tax rebate dollars are also a key source of revenue used to fund city services.

“Our computer records go back to 2006 and this is the first year we have gone over $1 million,” said Houston City Clerk Bobby Sanderson. “We are also off to a good start this year with a modest increase.”

The city’s fiscal year runs from Oct. 1 to Sept. 30. Sales tax rebates collected in any given month are reported the following month and checks sent to municipalities the next month.

Houston collected $967,971.06 in sales tax diversions in fiscal year 2010-11 compared to the most recent figure of $1,019,594.92 for fiscal year 2011-12. The city’s lowest rebate during the last six years was in fiscal year 2008-09 with $932,183.56 returned to the city.

Sanderson admitted he did not know exactly what prompted the rise last year.

“I would venture two reasons for us to top the $1 million mark,” said Sanderson. “I think gas prices have gotten so high people are shopping locally rather than driving out of town. The second reason is, I think local merchants have realized this trend and are trying to stock their shelves with more items at a competitive price so people don’t have to go out of town to shop.”

Sanderson also said shopping locally allows the City of Houston to provide more and better services.

“It allows us to pave streets, fix water pipes, pickup up dead dogs, mow the grass and keep the parks pretty so people can play in them,” said Sanderson. “All that helps raise the quality of life in Houston.”

Sanderson said with the approach of the Holiday Season, he hopes people will remember to shop local first before driving out of town.

“This is not a crass commercial message we carry,” he explained. “It takes care of people in this town even as we conduct our own affairs. The folks in Tupelo are plenty nice, but I’d rather put something into Houston Harry’s paycheck if I have a choice.”

Sanderson said sales tax rebate dollars account for more than half of the city’s revenue budget with ad valorem taxes raising about $800,000.

“We rely on sales taxes to fund city services a lot,” said Sanderson. “People fuss about how high their taxes are but they would be a lot higher if folks didn’t shop in local stores.”

City school taxes are also figured into the tax bill of those living in the city limits.

All sales taxes figures are reported and rebates are paid by the Mississippi Department of Revenue.